Perseus falls on gold output forecast

Shares in Perseus Mining (ASX, TSX: PRU) fell on Wednesday after the Africa-focused gold miner said annual output is sill affected by developing the Nyanzaga project in Tanzania that is scheduled to begin mining in early 2027.  

Annual gold production is pegged at 515,000-535,000 oz. at an all-in sustaining cost of $1,400-$1,500 per oz., according to a new five-year outlook on Wednesday. The outlook to 2030 also covers Perseus’ Sissingué and Yaouré gold mines in Côte d’Ivoire, Edikan in Ghana as well as Nyanzaga. The company’s fiscal year starts July 1. 

“It is clear that this is a temporary setback,” CEO and managing director Jeff Quartermaine said in a release. “Perseus’s strategy of consistently producing between 500,000 to 600,0000 oz. of gold per year at a cash margin of not less than $500 per oz., is eminently achievable.”

Perseus Mining’s Toronto-listed shares fell 5.8% to close on Wednesday in Toronto at C$3.22 apiece, giving the company a market capitalization of C$5.13 billion.

In 2023, Perseus delayed its Meyas Sand project in Sudan to prioritize the development of Nyanzaga instead, a decision it says would drop its annual gold output below 500,000 oz. in 2026 and 2027. The company first achieved that annual production target in fiscal year 2022.

 

1/3 from Yaouré

The company is forecasting Yaouré will account for a third of production while Edikan is due to supply 28%. Yaouré, is to account for production of 2.6-2.7 million ounces. The mine, which entered commercial production in March 2021, is expected to produce 210,000 oz. annually over a 12-year mine life.

Meanwhile, the Sissingué gold complex would provide 10% of company output. The recently committed Nyanzaga project is anticipated to contribute the remaining 28%.

The Australian miner said it “has strong confidence” in its ability to deliver on this five-year outlook, underpinned by a mine plan with high geological and technical certainty, with 93% of the production forming part of the existing ore reserves.

Total development capital of $878 million has been allocated to the operating assets during the period to achieve this production outlook, it added.

“With cash and undrawn debt capacity currently exceeding $1.1 billion, Perseus is fully funded to not only deliver the five-year outlook as presented today but also consider a prudent mix of future growth opportunities beyond the current plan,” Quartermaine said.